The official said the case alleges Mr. Alierta used privileged information to buy and sell shares in Tabacalera in 1997 while he was chairman of the Spanish tobacco company, confirming earlier reports in the Spanish press. A spokesman for Telef&oacute;nica, based in Madrid, declined to comment on the case and said Mr. Alierta was unavailable for comment.

If the case goes forward, Mr. Alierta would be the second Spanish corporate head to stand trial this year after Emilio Bot&iacute;n, chairman of
Santander Central Hispano SA,
was tried on charges of misappropriation of funds and mismanagement. He was acquitted in April. Mr. Luzon, Spain's top anticorruption official, is asking for a four-and-half-year jail term for Mr. Alierta. Luis Javier Placer, Mr. Alierta's nephew, is also accused in the same case and faces as many as four years in jail. Mr. Placer couldn't be reached for comment.

The official added that the prosecutor filed the charges with a Madrid Court Monday, and that Investigating Judge Jos&eacute; Santiago Torres is handling the case. Judge Torres must now review any statements presented by Mr. Alierta's lawyers and decide whether the case should go to trial.

The official couldn't provide a specific deadline, but said that any decision is unlikely to be announced within the next few days.

Mr. Alierta in 2000, after a four-year tenure, left Tabacalera -- which merged in 1999 with French tobacco company Seita and became Altadis SA -- to become head of Telef&oacute;nica, the largest telecommunications company in Spain and Latin America. He currently owns 837,200 Telef&oacute;nica shares, which have a market value of about &euro;11.4 million and represent a 0.02% stake in the company.